Private Equity
This asset class allows investors to participate in the growth of privately-held businesses, with the aim of achieving higher returns in the long term than those available on the open market. Private equity covers a variety of investment opportunities, divided into the following broad categories.
Venture Capital Equity – for the creation or expansion of smaller companies, often in the technology, biotechnology or other emerging market sectors.
Leveraged Buyout Equity – providing capital for the acquisition of larger, more mature companies with established, predictable levels of cash flow. Leveraged buyouts generally imply a change of corporate ownership.
Special situations – providing equity for companies that may be experiencing operational or financial difficulties.
Investors can gain exposure to private equity through direct investment in privately-held companies or through specialist private equity funds. Private equity is categorized as a high-risk, potentially high-return asset class and, as such, will not be suitable for every investor.
